PRG Holdings Berhad Annual Report 2019

PRG HOLDINGS BERHAD 180 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2019 cont’d 36. FINANCIAL INSTRUMENTS (continued) (a) Capital management (continued) The Group monitors capital using a gearing ratio, which is net debt divided by total capital. The Group regularly reviews the gearing ratio to ensure they are at acceptable levels and within industry norms. Net debts are calculated as total borrowings less cash and bank balances. Capital represents equity attributable to the owners of the parent. A detailed calculation of the net debt is shown below: Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000 Borrowings 32,999 46,593 8,411 15,060 Less: Cash and bank balances (23,386) (35,079) (130) (501) Net debt 9,613 11,514 8,281 14,559 Total capital 158,795 131,958 173,566 147,877 Gearing ratio 6% 9% 5% 10% Pursuant to the requirements of Practice Note No. 17/2005 of the Bursa Malaysia Securities Berhad, the Group is required to maintain a consolidated shareholders’ equity equal to or not less than the 25% of the issued and paid-up capital (excluding treasury shares) and such shareholders’ equity is not less than RM40,000,000. The Group has complied with this requirement during the financial year ended 31 December 2019. (b) Categories of financial instruments 2019 2018 RM’000 RM’000 Group Financial assets Amortised cost Trade and other receivables, net of prepayments 65,617 98,678 Cash and bank balances 23,386 35,079 Fair value through other comprehensive income Other investments 6,452 - 95,455 133,757 Financial liabilities Amortised cost Trade and other payables 133,581 153,724 Borrowings 32,999 46,593 166,580 200,317